Ally Financial, the auto lender bailed out by the U.S. government, appointed Jeffrey J. Brown as chief executive officer, succeeding Michael A. Carpenter, who's also leaving the board.
Brown, 41, will join the board and work closely with Chairman Franklin "Fritz" Hobbs "on all areas of the business," the Detroit-based company said Monday in a statement. The changes are effective immediately.
Carpenter, 67, has refocused the firm on auto lending and reducing expenses after it took a $17.2 billion rescue from the U.S. Treasury Department, which had owned as much as 74% of the company. The government sold the last of its stake in December. Ally sold international assets and put its subprime mortgage arm through bankruptcy before going public last year.
"Brown had been positioned as something of an heir apparent for a while, but the timing of Carpenter stepping down is a surprise," Christopher Donat, an analyst at Sandler O'Neill & Partners LP, said in a phone interview. "It could mean a whole lot of things."
Ally has declined more than 26% since the IPO. It faces rising scrutiny from regulators who have been cracking down on subprime auto lending as more borrowers fall behind on payments. Ally is also under pressure after General Motors Co. announced that it will exclusively use its own lending arm for a large portion of its cars.
"Having completed our IPO last April and exited TARP in December with a strong balance sheet and a market-leading position, it is the right time for me to step aside," Carpenter said in the statement, referring to the Treasury Department's Troubled Asset Relief Program. He said that he's been working with Ally's board for several months on succession planning.
Brown most recently was president and CEO of Ally's Dealer Financial Services business, overseeing automotive-finance, servicing and insurance operations, according to the statement. He previously was senior executive vice president of finance and corporate planning, since June 2011, Ally said.
"I am honored to be Ally's new CEO," he said in the statement. "We have the focus, resources and capability to take advantage of opportunities."
Before joining Ally, he was corporate treasurer for Charlotte, N.C.-based Bank of America, where his duties included managing interest-rate risks. He received a bachelor's degree in economics from Clemson University and a master's in business from Queens University in Charlotte.
Carpenter joined Ally in 2009 when the company was called GMAC, the former finance arm of GM.